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Comment by mattszaszko | Hacker News Reader

Yea, I wouldn't go with a fully fledged payroll company for this. The person working for you should be willing to come in as a contractor and set up the necessary legal and accounting framework for themselves. It's pretty easy to be self employed and able to produce an invoice in most European countries. Mind you, if this is their first time doing it, it'll occupy a significant portion of their mind space and you have to accommodate that. In a way, they're doing you a favour, because this way it's cheaper and easier for you.

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From the employee's perspective, this is a pretty terrible idea in many places, including some in the EU (depending on the company's and subsidiaries' jurisdiction, it might be a terrible idea for them too)

If you try this sort of thing in Australia, you violate the Alienation of Personal Services Income Act 2000, and will be in a world of pain. Many other countries (including e.g. many post-2004 EU members) have similar laws against "stealth" employment, enforced with varying degrees of eagerness and effectiveness, as common in that region.

If you're only serving a single client, you're usually not a contractor. If you pretend to be, and if the tax office ever decides to scrutinize what you do, chances are they'll tear you a new one. Insist on having an "employer of record" that does things by the book, and knows local regulations, tax codes, and mandatory insurances.

> Insist on having an "employer of record" that does things by the book, and knows local regulations, tax codes, and mandatory insurances.

I just read an article claiming that in Germany employers of record are treated like temp agencies and thus limited to 18 months.

I don't know much about German law specifically, but it's true that some countries of residence are plain incompatible with certain business models, and there might not be legal solutions available.

For example, trying to be a professional soldier in Iceland, or a prostitute in the US, just plain won't work out legally, no matter how complicated the arrangements you make.

Comments like this make me thankful for business in the US. You can hire contractors, or be a contractor, with 0 friction.

Meh, depends entirely on your trade. I'd much prefer to be an IT contractor in the US, and much prefer to be a prostitute in Australia.

And I count myself lucky to live in a country where the people's incentives mostly align with the way I prefer to make a living.

The thing is, if your customer does not have legal presence in your country, tax office will likely not care as long as you pay your share of income tax and social security. I live in the EU and work as contractor to overseas companies since 2015, never had issues. I live in big city, I know from colleagues who live in smaller towns they are sometimes tested for tax correctness, but never for the form of their relationship to their customer.

In the same time if your customer does have legal presence in your country of residence then that's entirely different situation amd tax office might see it as tax avoidance, though this will depend on country of your residence as laws are implemented differently in different EU member states, and also the legal form of your own company.

If in doubt, hire accountant who specializes in your area.

> If in doubt, hire accountant who specializes in your area.

Indeed. This should be the top answer to OP's question.

In Germany this would be considered "Scheinselbstständigkeit", not sure what the way around that is or if other countries have something similar.

As always it's nigh-impossible to fully read a German word so I have to skim through it: "Schei ... se".

I know this word! Yes, it's a shitty situation :)

I’ve been told that you either need to have a second customer where you spent X% of time. Or you open up a company with a friend who is in a similar situation, but works for a different company.

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